Why the Cypriot Deposit Tax Could Be a Good Thing

3/18/2013 8:01AM

The Cypriot government has little option but to raise money through a bank deposit levy, but it may also be a good thing, argues Heard on the Street's Simon Nixon. He says taxing the current generation rather than future ones might allow Cyprus to move on more quickly. Photo: AP

This transcript has been automatically generated and may not be 100% accurate.

... the ... Cypress also ... it's ... on ... Wells's has caused some concern ... in global financial markets ... that saw it makes the success of this levy as controversial as it may be ... could actually be a good thing ... Simon Russell and why the troika who negotiated the bailout side has ... come up ... with that ... tax on bank deposits ... would be treated any choice of May ... you can use some ... of what this is ... based in Boston ... but it needed a band of Hunter of seventeen billion or so hundred a forty percent of its GDP ... that would lower the source of ... which appear in the latest of several ... other when no other sources of decorative so it did it very hard to restructure pay us suckers governments' debt in the way to do with the Greek typical slump was a real possibility ... that was owned by phones to restructure the Benin on and the Netherlands and Spain ... so really the only other option was to choose to get to try and get the cost of the bailout down to a level of which ... the Cypriot government with ... the boss was to ... take some The was that was the ... time they are in effect of the thatthe pauses were stepped on by way of attacks okay let's see have courses that ... was a was immediately ... and insides of on the backs of take money out ... you know that's the window for the view that the kids a lesson from potentially other bikes but is really the case ... that content is a nation have it all means Cypress's is as suggesting ... a special case someone on ... what is the reason why there should be contagion ... of beyond sought to sources on any ... of the situation Cypress's ... is unique in its unit in the sense that at some ... of the structure is buying the system is very different from Wells's sensitive very heavy deposit on that ... and ... and and they that they did it Stifel was a very different ... of course if you ... if you basically say to you um ... it even Cypress of thinking that ... the banks might be close to three or four days will it Russell the soft is available to the beleaguered CATM strongest car started to receive this off but ... I promise exited the money to be taken at the pauses when the facts ... reopened ... so the image says it ... is therefore triggering a one of the bank in or to avoid this tax stalled ... well assisting of course I took ... note of something tasty sank into a save you money and you know back ... in vaccines has lost some of it on its own right ... both the euro ... it's it's a it's a very ... tough thing to desert bonds and controversial things that it ... was a concern will build services were built us it was no deal ... which would if it is also sought crystal with could still be exhausted maybe they would ... that that that that the deal would give the go ahead of this letter that it ... happened but would be ... that that that that was to be a very ... the front before the presence of some Cypress leads us to forge is the devaluation of financial system with about so that's one also said that ... I'm ... that Wilson's inaugural summit says ... on the cards ... in sums of ... of ... of the euro zone just taking over the headset was false ... but there's another aspect that something is ... easy to its goal of sandwiches but ... you know that's on ... the boat that took the opposite of the annuity stages of this crisis ... the ... response was to ... put the burden on to future tax cuts ... and so that which is getting is that when you when the other bailouts was talking to Social gives the sinus pressure ... is a morally superior to put the boat them all ... the debt on the beach taxpayers the people and pastrami across Europe to get it all ... pour sauce the current generation ... to make a contribution I think actually ... it's also more difficult people think ... the the west side as result of the things that ... will let such and ... such so I mean get there's an element of risk on balance of the industries that ... are no hands ... is this this whole situation is going very well liked him it comes to some people ... in doesn't the Y to the area the white that ... Wells but it has been very well fact the very many weeks and months parents ... yet and ... I'm actually the euro zone can deal with this very difficult situation ... then it may well be the last victim in full ... thank the much